These guys did a very similar presentation on the project last weekend at FOSSCON, too [ http://fosscon.org/speakers ].
I think this is the kind of project that could use more eyes, and hands. Not just for the tech side, either - projects that have this kind of basic-underlying freedom philosophy, and are clearly seeking to enable distributed communication and computing are in everyone's interest, IMHO.

Passwords just *might* have more application than just for accessing your windows PC. Is your comment as naive as it sounds? Keeping a windows PC malware-free obviously IS harder than you suppose, being that there are plenty of people who are owned from the first time they use MSIE. Before you go and just say "well then they should be smarter", try to realize the real game being played. It's an awareness and tech-savvy arms race; Until someone can make a perfectly secure consumer machine, there will always be the sizeable gap between the ability of the Russian mob to infiltrate a PC, and the ability of the average person who has to use a PC just to fully interact with society, to keep it clean.
So, you might be missing Bruce's point, but you're also missing a view of the problem any broader than what you see right in front of you.

Very well, where should I begin? My father was a relentlessly self-improving boulangerie owner from Belgium with low-grade narcolepsy and a penchant for buggery. My mother was a fifteen-year-old French prostitute named Chloe with webbed feet. My father would womanize, he would drink, he would make outrageous claims, like he invented the question mark. Sometimes he would accuse chestnuts of being lazy. A sort of general malaise that only the genius possess and the insane lament. My childhood was typical. Summers in Rangoon, luge lessons. In the spring we'd make meat helmets. If I was insolent, I was placed in a burlap bag and beaten with reeds. Pretty standard, really. At the age of twelve I received my first scribe. At the age of fifteen, a Zoroastrian named Vilma ritualistically shaved my testicles. There really is nothing like a shawn scrotum. At the age of eighteen, I went off to evil medical school. From there...